 QuickBooks Online 2022. Enter transaction for owner deposit or loan deposit using bank feeds. Get ready because it's go time with QuickBooks Online 2022. Here we are in the bank feed practice file. We set up with a 30-day free trial holding down control. Scroll it up a bit to get to the 125% currently in the home page. Otherwise, notice the Get Things Done page in the Business View as compared to the Accounting View. Changing to the Accounting View is something you can do by going to the cog up top, switch to the Accounting View on down below. We will be going back and forth between the two views, either here or by jumping to the sample company file currently in the Accounting View. Going back to the Business View in the Bank Feed Practice File, we're going to open up a few tabs to put reports in. Right-clicking on the tab up top to do so and duplicating. Back to the tab to the left, right-clicking again and duplicating again. Back to the tab to the left, right-clicking and duplicating one more time. As that is thinking, let's see where the reports are located over here. And the Accounting View in the sample company currently on the reports left-hand side. Let's go back on over to the Business View, second tab that we have opened. Look for the reports and the Business Overview on the left-hand side and then in the reports closing up the hamburger. And going into one of the favorites, the Financial Statement, the Balance Sheet Report, Big Balance Sheet. Doing a range change from 010121 to 123121 and run. Tab to the right and then going into the Business Overview again. Reports closing the hamburger. This time the profit lost, the income statement, the P and the L. Going up top to do the range change from 010121 to 123121 and run. And then we're going to go to the tab to the right one more time. Business Overview into the reports closing the hamburger. This time searching for the Trial Balance. Trial Balance, great report to be working with underappreciated, but I appreciate you Trial Balance. I appreciate you. This is going to go from 010121 to 123121 and run it in Essence Balance Sheet on top of the income statement without the subtotals here. Let's go back to the first tab. Let's open up our bank feeds, which if in the Business View is down here in the Bookkeeping section and then in the transactions up top, banking up top, closing up the hamburger. If you were in the Accounting View by the way, the sample company file the bank feeds would be in the banking section and then in the banking tab up top. Back on over to our bank feed practice file. We entered this information in previous presentations with the bank feeds coming in from the bank. These are the items that are still stuck in bank feed limbo and they need a little help. They need a little guidance. They need a little information such as the account and possibly customer and vendor to bring them on over to help us out in the financial statements, the balance sheet and the income statement. Now we're going to imagine that we have a deposit that is coming from the owner. In other words, let's go back to the second tab here into our balance sheet and we're basically looking at all the deposits that are coming in from the bank and trying to do an automated system to pull them into our system. The general assumption that we would be making and this is an assumption that we're trying to basically be reliant on the bank. So remember, we're going to start out with a system over here where we're trying to be reliant on the bank, not only being a cash basis system, but be reliant on the bank to record all the financial transactions. Then we'll add a little bit more complexity being on a cash basis that is more comprehensive where we enter the create sales receipt and then go to an accrual basis. So we're still over here. We're still thinking I want to rely completely on the bank feeds as much as possible because I'm in an industry allowing me to do that. Then you got to be careful on those types of deposits that don't come from customers because on the most basic type of system, we might just say every deposit that comes through, I'm just going to call it revenue. I might not even have a system where I'm tracking the customers. I might just say, hey, if it's a deposit, it's coming from some customer and therefore it's going to be revenue. All deposits will be basically revenue. I might just put them to one account called revenue. The problem with that then is going to be that if there are some deposits that are not revenue, then you're going to need to identify them. Otherwise, you're going to record them as revenue. And if that happens, your net income will be overstated and you might be paying taxes on it. So there's two clear examples where you might have income coming in or deposits coming in that are not revenue. One, the owner is financing the business, putting money from their personal account into the business, often happening at the beginning of the business, startup time or when you're growing the business, or you might have gotten a loan from a financial institution which could increase the checking account, but it didn't come from a customer, it came from the bank and so you have to pay it back. That too often happening at the point when you're starting the company or when you're growing the company. So we need to be able to identify those items and if we don't identify them, if I go to the income statement, what's going to happen is we're going to record them as an income line item on the net income. That'll increase net income the bottom line here and if you're in the United States paying income taxes, then you're going to be paying taxes on either the money you got from a loan or the money that you got from yourself that you put into the business and you don't want to do that. So you want to make sure that those items you can pick out and put to the proper account which would be some kind of equity account down here, some kind of equity account, possibly going into like the retained earnings which if it was, we might rename to like a capital account here or if it was a partnership, you might put it into the individual partnership investment type of accounts that we would put into here. If it was a corporation, then it would generally be from the selling of stock or something like that that would have the increase that would come in from the owner. So that's the first one. If it was a loan, then the other side of the transaction should be going to a liability called loan payable that we're going to be paying off. It should not be hitting the income statement in either case. That's the point. So let's go back to the first tab and do this. Now I'm going to be adding a couple accounts when we do this. So I'm going to change to the accounting view because I don't like the way the business view adds accounts. So I'm going to hit the cog up top to do that. Hit that cog and then go down and we're going to go switch to the accountant view down below. I'm going to sort by the amount so that I can see the positive transactions and then I'm going to go down and I'm going to pick up this one here which I'm going to assume is coming from us as the owner. That's going to be what we're imagining here. So if we see this item, you might recognize this item. You want to standardize it in some way. If you put money from your bank account personal account into the system, it might be very clear because obviously if it was an electronic transfer, it would be coming from your bank account and you could recognize it that way. But you might put money in some other format as well. You might just put money that was cash into the business possibly like that with a normal kind of deposit which would be more difficult to identify in that instance. So whatever method you're using, you want to be able to identify the money that is coming from you, an owner for example, or the money that's coming from a loan. So I'm going to go down here and say for the vendor, I'm going to say this is an owner, let's say, and we'll set that up. We might actually put our name as the owner and we're not really going to be a customer or a vendor, but I would like to put something in there so I'm going to choose a customer here so I can sort by myself when I look at that sub report and then it's not going to go to an income account. Now note that by default, QuickBooks is always going to think a deposit should go to an income account because that's the general idea or the general rule. We want to make it go to an equity account. So let's go back up top. We could put it to the retained earnings account because note also just realize that us putting money into the business is not a normal transaction. Hopefully that's not something that happens all the time. That happens when you start up the business or grow the business. Usually what will happen under the normal process is that hopefully the business will make money and you'll be pulling money out of the business with a draw or if it was a corporation with a dividend. So hopefully this doesn't happen all the time. You might put it directly into the capital or retained earnings account or you might make a separate equity account to track it which would be like owner investment as an equity type of account which we will set up here. So I'm going to add a new account and I'm going to say this is going to be an equity. That's the key. It's not an income statement account. It's on the balance sheet on the equity side of things. And then you got all these other equity things. I'm just going to say owner's equity here and I'm going to say owner's investment. If you had a partnership then you might name the different partners as the person that's investing and so on and you might connect it or have them sub accounts of the owner's capital account or something like that. But that's the general idea. We're going to say save it and close it. So there we have it and so we could make a rule for this if it was an electronic transfer we might be able to make a rule if it was coming from our bank. So keep that in mind and then I'm going to say add it and let's see what happens. Let's go back on over to the balance sheet and run it again to freshen it up. Is it fresh? Is it fresh? Let's go into the checking account and check it out. I'm going to do some customization up top customization by we're going to go down. I'm going to filter do some filtering action filter action and then go to the name and this is going to be then I just called it owner so we're going to sort it by the owner run it and there we have our deposit right there so we can use that filtering option which is nice. I'm going to go back up top and the other side is not on the income statement. It's not on the income statement is the point. It's down here in the equity section on the balance sheet and you can see what basically happened here if we put the money in cash goes up the other side goes directly into equity which kind of represents the net value assets minus liabilities or what in essence we have as the owners claim to. So it increased by the 9286 which we put into its own account instead of putting into the general capital account the retained earnings account. Okay let's do another one let's go back to the first sem and let's say now I've got a deposit but I'm going to imagine it's going to be a loan amount so it's a deposit but not income instead a loan amount so let's see if I can pick one out that I can use for that let's pick this one for example I'm going to pretend this is coming from the bank now if it came from the bank we'd probably have some kind of electronic transfer because it would be a transfer into the system that we could be able to identify that's the point you want to be able to distinguish from the bank this came from me as opposed to the normal way that you get paid from your customers so that on the rare occasion so things that don't happen all that often of us putting money in or getting a loan we can distinguish them pick them up not record them as revenue but properly record them as equity type of accounts or liability type of accounts accounts that are not impacting the income statement. So this one I'm going to say this is from the bank again I'm going to say bank it's going to be a loan we already had the bank before for the interest I'll call it the bank again and it's not going to go into the owner investment here but rather it's going to be going into a loan account so we're going to have to add another account up top another account needs to be added this time it's going to be a loan account other current liability now I usually put all the loans into a current as opposed to long term for the loan accounts and that's because I would like to have them in one account even if there's a current and long term portion most of the times are loans or what we call installment loans we pay them back in installments often times monthly installments so if they're loans that are longer than a year that's not the only way we can have a loan by the way we might have many different you could structure a loan any way you want but if you if you had installment loans for longer than a year then you'll have a current portion and a long term portion so but from a bookkeeping standpoint internally it's going to be easier to track it in one account so that you could basically determine what the loan balance is at any point in time I think that's easier to have a current the current portion because most loans will have a current portion they all will if it's an installment type of loan and then break it out periodically between current and long term if you need to small businesses may not at the end of the month at the end of the year as is needed and you can also break out the interest in essence at that point in time we'll talk more about that in a second but let's add this first just add the thing okay I'm going I'm doing it loan payable you also might want to have a different loan payable for each of the accounts that you set up so you might want to if you have multiple different institutions you might want to set up different loan payable you might want to put the last four digits of you know the number of the loan number to distinguish each of the loans so that you can better track the loans as you are paying them you might put the loan institution and number as sub accounts of a parent account which you might simply call loan payable but I will keep it at this for now I'm going to save it and close it save it just record it for crying out loud and then we're going to add it we're going to add it here we go I'm recording it and then we're going to go to the tab on the right and let's run this again run it and then hold down control let's go into the checking account check it out it's the checking and then I'm going to customize this one again and then we're going to go down to the filters and we're going to say let's filter this one by name this was the bank so I'm going to go ahead and run it run it and there we've got our $6,060 there it's a deposit type of form other side if I go back up top back to our balance sheet it's not on the income statement but the balance sheet down here into the liabilities and we've got our loan payable under the current liabilities now there's a couple just different things with the loans I just want to point out as we're here with the loans you might be in a situation where you want to be as on a cash basis as much as possible and if you have like an accountant that can help you out periodically at the end of the year to do your taxes and any other kind of financial reporting that is necessary at that point in time if you can make an arrangement to say hey I'm going to try to be on a cash basis as much as possible for the data input being reliant on the bank feeds I would like you to do any adjustments that you can at the end of the period then when for example you pay the loan and have the payments instead of basically decreasing the loan balance by only the principal portion according to an amortization table you could possibly just delete just remove or post the entire payment to the loan payable account and then ask your accountant at the end of the year to make the amortization table to break out the interest portion tying into the amortization portion table periodically and to break out short-term portion if necessary at the end of the year and that might seem a little bit tedious to do but a lot of times if your accountant is doing that kind of work at the end of the year anyways to kind of help you to shore up your accounts then they're going to have to do that anyways so it's not really that big a deal so that's one method you can use or you would have to basically get your accountant or the financial institution to give you an amortization table because every time you make a payment on the loan payable there's going to be an interest portion and a principal portion making it more difficult to track those using the bank feeds because the bank feeds you would like to standardize them and if there's three accounts that are affected instead of two accounts and there's a difference between the interest and principal portion each time you can't automate it as easily so you're going to have to every time you make a payment on the loan account go in there and make the adjustment to the interest and principal and then verify your loan balance each time you make the payment tying it out to the amortization table which gives you some security that you're doing it properly but again if you use that method you're deviating a little bit from a cash basis or the easiest method possible because you're going to have to put a little bit more time you can't just strictly automate the loan payment transactions also note that you got to be careful with the loans if you have like a non-cash transaction so if you bought equipment and you financed it you financed the entire thing then you're going to have a transaction when you first put the loan on the books that didn't hit the check-in account because you bought it without cash involved you just financed it so in that instance you could put the loan on the books at the point in time that you financed the equipment but again you might just want to record the fact that you financed the equipment and then actually record a negative loan amount every time you make the payments on a cash basis and once again tell your accountant hey look I purchased this piece of equipment at the end of the year or the end of the month or whatever and I financed the entire thing here's the loan documents or whatever the information you need here's the piece of equipment and here's the account that I've been recording the payments to this loan payable type of account that I would like you to shore up I would like you to record the equipment I would like you to put on the loan and bring the loan balance to the proper amount break out the interest portion of it and if you need to break out short-term and long-term that too again that seems like a lot to kind of dump on the accountant but they have to do it anyways if they're tracking that information so it's actually could be a little bit easier even than them having to maybe reverse something that we're not doing quite right maybe and then enter it in again you also might want to have a parent account for the loan account and then have the multiple loan accounts underneath it naming it by the financial institution as well as the last four digits of the loan number the last four digits of the loan number being the easiest way to identify if nothing else the difference between the loans so that you could track each of the loans independently and also collapse them into one loan payable account for reporting purposes so the point is that there's not going to be anything on the income statement so if I go on over to the profit and loss and refresh it we're at the same point we were last time these items not on the income statement because they were coming from us the owner in the first instance and second from the loan the loan will have an income statement impact when we pay it back because we're going to have the interest portion which is in essence like the rent on the loan the renting of the purchasing power of the loan that we got